Noranda Income Fund Unit T.NIF.UN

RE: New Financing/ Distribution

[quest13]

Hello Birdie,

The only comment I can make on future distributions is that we will not hear anything until after the financing closes, and the trustees have been able to wrap their minds around the conflicting views from Xstrata and everyone else.

Much will depend on the restriction clauses that the note holders and bankers have insisted on having in the contracts. I am assuming for my investment decision to remain a Unitholder that the restriction and definition of excess cash to that needed to maintain banker determined ratios are reasonable bank needed clauses.

That being said I can see a fairly good distribution being possible.

On the other hand I can see Xstrata as possibly wanting to play brinkmanship and keep distributions down so that at the end of the existing contracts in 2017they can say that the plant will not be needed post contract; but they are willing to take it off the hands of the fund for a pittance. I can also see that after getting the plant they might suddenly discover it was worth operating for a while and in fact it would then run for the foreseeable future.

What happens all depends on the Independent trustees and how strong they can be in fighting with Xstrata to resist calls to provide for high provision for remediation of the lands on which the plant is built and other excessive provisions rather than paying distributions.

I see the involvement of Roland Keiper of Clearwater Capital as very much a positive factor in the fund over the next period and his action in pestering the trustees and managers for information will, in my opinion, be a strong factor in stiffening the backbone of the trustees to negotiate with Xstrata on our behalf throughout the period.